Title: PROFIT AND LOSS ACCOUNT
1www.redrow.co.uk
2GROUP OBJECTIVE
- To deliver long term sustainable growth and by
so doing deliver value to our Shareholders
3SHAREHOLDER VALUEEARNINGS PER SHARE (p)
- Basic EPS increased by 33.7 in 2001 / 02
- Annual compound growth rate in EPS of 30 over
last five years
4SHAREHOLDER VALUEDIVIDEND PER SHARE (p)
- Dividend increased by 10.2 in 2001 / 02
- Annual compound growth rate in dividend per share
of 11 over last five years
5RETURN ON CAPITAL EMPLOYED
- ROCE at 30 in 2001 / 02
- ROCE of 28 over the last five years
6OPERATING PROFITS (m)
- Operating profits increased by 23.8 in 2001 / 02
(before charging 4.3m for Tay Homes integration) - Annual compound growth rate in operating profits
of 22.7 over last five years
7HOUSEBUILDING MARGINS
- Operating margins in housebuilding at 17.6 in
2001 / 02 - Sustainable levels based on current land bank and
markets
8CASH FLOW
- Reduction in net debt of 19.1m in 2001 / 02
- after increasing owned land bank to 13,400 plots
- after acquiring Tay Homes for 30.6m
- Since December 2000, borrowings have reduced by
nearly 40m - Since June 1997, operating profits increased 2.7x
whilst cash flow has been positive after
adjusting for share buyback
9FINANCIAL RESULTS
- Include Tay Homes from 9 January 2002
- Include effects of FRS 19 (deferred tax) both in
current year and comparatives - FRS 17 (pensions) transitional rules applied
- net pension deficit after tax credit 1.6m at
30 June 2002 - market value of assets 26.6m
- defined benefit scheme closed 1 October 2001 to
new members (ex. existing employees under 21 and
new employees as determined by Redrow plc)
10TAY HOMES ACQUISITION
- Acquisition 9 January 2002
- Summary
11TAY HOMES ACQUISITION
- Land Bank
- 1,400 plots acquired with planning
- fair value 19,700 per plot
- 17 of average selling price
- 200 plots under contract 150 subsequently
acquired - 300 plots of forward land
- Additional land opportunities in negotiation
12TAY HOMES ACQUISITION
Post acquisition trading
13TAY HOMES ACQUISITION
14TURNOVER ANALYSIS
- Homes includes 36.2m relating to Tay Homes in
2002 - Homes increase excluding Tay Homes is 22
15PROFIT ANALYSIS
- Homes includes 5.8m relating to Tay Homes in
2002 - Homes increase excluding Tay Homes is 20
16PROFIT ANALYSIS - 2002
17PROFIT ANALYSIS
18CAPITAL EMPLOYED
19STOCKS
20RETURN ON CAPITAL EMPLOYED
21CASH INFLOW FROM OPERATIONS
22CASH FLOW
23NET ASSETS
24BANKING FACILITIES
- m
- Syndicated loan 180
- Bilateral facilities 70
- 250
- Syndicated loan extended
- 5 years from 9 August 2002
- increased from 110m to 180m
- 5 UK based lenders
25HOMES - TRADING PERFORMANCE
26HOMES - BRAND PROFILE
27HOMES - BRAND PROFILE
28HOMES - REGIONAL PROFILE
29HOMES - SALES PERFORMANCE
30HOMES - SALES PERFORMANCE
- In The City schemes reflect only three
developments on sales release compared to six in
2001
31HOMES - SALES PERFORMANCE
- Tay forward sales included in appropriate brand
based on specification
32HOMES - CONSTRUCTION
- BUILD COSTS
- Material prices controlled in line with inflation
- Ongoing trade shortages resulted in cost
increases of between 5 and 10 for some trades - Increasing burden of building regulations and tax
increases
33HOMES - CONSTRUCTION
- STEEL FRAME CONSTRUCTION - FRAMING SOLUTIONS plc
- 50 JV with Corus combination of skills
- EC clearance obtained
- Redrow investment up to 3.0m
- new production line at Swadlincote mid 2003
- capability over 4,000 units per annum
- breakeven at approx. 2,000 units per annum
- Redrow
- Focus on Harwood and Design Schemes
- No material effect on cost base
- Share of loss in year to June 2003 approx. 0.8m
34HOMES - LAND BANK ANALYSIS
Forward land contribution to current land bank
1,150 plots (25 of purchases excluding Tay)
35HOMES FORWARD LAND
- Peacock Farm, Bracknell
- Option secured 1995
- Development cleared by Secretary of State 2002
- 750 plots for Redrow Homes (Southern) Limited
36HOMES - LAND WITH PLANNING
The average selling price of the 13,400 plots
with planning at June 2002 is estimated at
140,000 per plot
37HOMES - LAND WITH PLANNINGBRAND PROFILE
Tay plots at June 2002 have been allocated to the
appropriate brand based on specification
38HOMES - LAND WITH PLANNINGREGIONAL PROFILE
39COMMERCIAL DIVISION
- FOCUS
- mixed use developments
- project management skills harnessed to assist on
In The City schemes
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44CURRENT TRADING SALES MARKET
- Reservations up just over 10 in first 9 weeks of
new financial year - Over 50 of new financial year completions
secured - Increases in sales prices still being achieved in
all regions
45CURRENT TRADING - LAND MARKET
- Good level of land buying opportunities
- Planning system remains an obstacle to bringing
sites on stream - Land requirements controlled as follows
- Current year - 100
- 2003 / 04 - 95
- 2004 / 05 - 80
46OUTLOOK
- Planning policies continue to restrict supply
- Demographics support production in excess of
current levels - Existing housing stock deteriorating in quality
- Cost of borrowing likely to remain at low levels
- Mortgage market remains competitive
- TRADING FUNDAMENTALS REMAIN SOUND
47SUMMARY
- Successful integration of Tay Homes
- Current position
- record forward sales in Homes
- effective low cost land bank in Homes
- established development programme in Commercial
- Focus remains
- consistently high ROCE
- sector leading operating margins
- sustainable and profitable growth
- ENHANCED SHAREHOLDER VALUE
48www.redrow.co.uk